Regional Market UpdatePresentation to:

NGA Sales & Marketing Conference

Tom KileyNortheast Gas Association

March 20, 2015Groton, CT

Continued on NGA web site…

http://www.northeastgas.org/about-nga/antitrust-guidelines

Issues

The Recent Winter

Developments in the Region

Proposed Infrastructure

Regulatory Initiatives

A Cold 2015…

• Coldest February in decades, with new monthly weather records in Buffalo, Syracuse, Binghamton, Hartford, Portland, etc. Coldest February in NYC since 1934.

• Consistent throughput, esp. Jan-Feb

• High demand on system infrastructure

• For New England gas utilities, new regional peak day set on Feb. 15, 2015 at approx. 3.9 Bcf.

1200 2200 3200 4200

New Eng. Actual

New Eng. Normal

Mid-Atl. Actual

Mid-Atl. Normal

Source: U.S. NOAA. Data thru Feb. 28, 2015.

Heating Degree Days,Nov. 2014 - Feb. 2015

Spot Price Less Volatile than Last Winter – but still volatile

Chart: U.S. EIA, February 2015

Spot Price Less Volatile than Last Winter – but still volatile

Chart: U.S. EIA, February 2015

2‐5 2‐31‐28 1‐8

2‐2

1‐13 1‐7

18 of Top 25 Days on Algonquin Pipeline Set this Winter

Chart: Spectra Energy

New Records for Pipeline Throughput: AGT

Location Dt/d DateWaddington 1,221,160 2/6/15

Brookfield 422,959 10/13/14

Waddington/Brookfield 1,544,556 3/5/15

Wright TGP 407,396 1/16/13

Wright & Shelton TGP 480,974 1/17/13

South Commack 562,789 2/17/15

Hunts Point 356,830 1/20/09

Northport/South Commack/Hunts Point 860,927 2/7/10

D/S of Milford Compressor Station 912,185 1/12/10

Total Physical Deliveries – All Meters 1,534,051 3/5/15

Supp

lyTG

P

Source:

NYF

Sys

tem

7 of Top 10 Delivery Days This Winter: IGT

More LNG Entered the Market

Photo: Distrigas

• Increased volumes this winter – drawn by strong regional prices (and low world prices)

• Distrigas and Canaport recorded steady throughput

• Excelerate’s Northeast Gateway offshore Gloucester, MA had first cargo in over 4 years, delivering 1 Bcf on Jan. 1

• Still capacity constraints on pipelines from Marcellus, so “east-end LNG” proved important

5.53.8

8 7.6

Jan.2014

Feb.2014

Jan.2015

Feb.2015

Monthly Import Volumes Bcf, Distrigas

Short-Term Price Outlook: EIA

Source: U.S. EIA, March 2015

0

2

4

6

8

10

12

Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016

Henry Hub Natural Gas Pricedollars per million Btu

Historical spot price

STEO forecast price

Source: Short-Term Energy Outlook, March 2015.

Note: Confidence interval derived from options market information for the 5 trading days ending Mar. 5, 2015. Intervals not calculated for months with sparse trading in near-the-money options contracts.

Stable Commodity Price

Chart: U.S. EIA, 3-9-15

Natural Gas Retains a Price Advantage

0

500

1,000

1,500

2,000

2,500

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Source: U.S. EIA, Mar. 10, 2015. Natural gas data is for Northeast states of CT, ME, MA, NH, NJ, NY, PA, RI, VT. Heating oil is U.S. average.

Average Consumer Expenditures for Heating Fuels, $, 2008-2015

Natural Gas

Heating Oil

Developments in the Region

Connecticut

Gov. Malloy announced “Clean Energy Initiative” with MA and RI, 2-15.

Iberdrola announces plans to merge with UIL, 2-15 (CT Natural Gas, So. CT Gas – and Berkshire Gas).

“Eversource Energy” is new name for Yankee Gas.

Proposed pipeline projects advancing: Tennessee’s “CT Expansion” and Spectra’s “AIM.”

Maine

Maine PUC votes 2-1 in Nov. 2014 to continue discussions on state’s possibly contracting with pipeline[s] for up to 200 million cubic feet of gas per day. It’s in response to 2013 legislation trying to “jumpstart” gas infrastructure devl’t in the state.

Massachusetts

Gov. Baker directed DOER last month to request that the DPU open docket on “Gas Expansion”, including considering how electric tariffs might support pipeline investment.

Legislature unanimously passed “gas leaks” bill in June 2014 – seeking to accelerate replacement of older distribution pipe components

MA Energy Office releases report in Dec. 2014 indicating Commonwealth needs more pipeline infrastructure to meet needs of power gen sector.

“Eversource Energy” is new name for NSTAR Gas.

New Hampshire

Liberty Utilities acquires NH Gas Corp. – propane system in Keene.

Proposed pipeline expansions:• PNGTS “C2C”• Tennessee’s

“Northeast Energy Direct”

• Spectra’s “Atlantic Bridge”

Clean Energy opens CNG fueling station in Pembroke, 7-14. NG Advantage is trucking CNG from there.

New Jersey

Infrastructure replacement programs advancing among all utilities. Example: this month, PSE&G proposed to NJ BPU a 5-year “gas modernization” plan with investment of $1.6 billion.

New York

NYS Dept. of Health announces that hydraulic fracturing should not be permitted in the state, 11-14. DEC preparing regulations to that end.

Public Awareness programs receiving heightened regulatory attention.

New York City

NYC “Clean Heat” initiative encourages phasing out the use of #4 and #6 oil in city buildings (and #2 oil as well).

In 2014, Con Edisonconverted over 1,400 city buildings from oil to gas on itssystem.

Since 2011,National Grid has converted ~500 buildings from #6 and #4 oil to natural gas, and is in the process of converting 82 more – with another 219 buildings still eligible for conversion, in its NYC footprint in Brooklyn, Queens, and Staten Island.

Rhode Island

Infrastructure replacement program continues to advance – with full regulatory support from PUC.

Gov. Raimondo announced “Clean Energy Initiative” with CT and MA, 2-15.

Vermont

Phase I of Addison Natural Gas Project advancing.

Extending distribution system south to Middlebury – planned for later this year.

In Feb. 2015, VT Gas announced that due to changing cost outlook, the proposed Phase 2 expansion to serve paper mill in Ticonderoga, NY will not move forward.

“Gas island” already operating in Middlebury, with CNG provided by NG Advantage -sourced at VT Gas.

Issues

Proposed Infrastructure

Source: U.S. EIA, 7-14

Marcellus Shale Production

Source: U.S. EIA, 3-15

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Marcellus Production, 2007-2015, Mcf/d

Prepared by NGA, based on publicly available information. Project locations approximate. As of 3-15.

VERMONT

Proposed Pipeline Projects

Spectra, “AIM”

National Fuel / Empire,

“Tuscarora Lateral”

Williams, “Rockaway Lateral”

Williams & Cabot,

“Constitution Pipeline”

Tennessee, “Northeast

Energy Direct”

Iroquois, “Wright

Interconnect”

Columbia, “East Side Expansion

Project”

PNGTS, “C2C”

Spectra, “Atlantic Bridge”

Tennessee, “ConnecticutExpansion”

Iroquois, “South to North”

National Fuel / Empire, “Northern

Access 2015 & 2016”

Dominion, “New Market

Project”

Tennessee, “Niagara

Expansion”

PennEastProject

Williams/Transco, “Garden State

Expansion Project”

Spectra/ Eversource

Energy/National Grid, “Access

Northeast”

Millennium, “Corning to Rockland”

> A 125-mile, 30-inch pipeline connecting Williams’ Midstream System in Susquehanna County, PA to Iroquois Gas Transmission and Tennessee Gas Pipeline in Schoharie County, NY

> Capacity: 650 MDth/d> Shipper: Cabot (500 MDthd); Southwestern

Energy (150 MDthd)> Owned (41%) and operated by WPZ; Cabot Oil

and Gas owns 25%, Piedmont Constitution Pipeline Company owns 24% and WGL Midstream owns 10%

> Target in-service date: 2016> Approved by FERC, Dec. 2014

Constitution Pipeline /Wright Interconnect Project

Algonquin Incremental Market (AIM) Project: Spectra Energy

Project Scope: Providing 342 MMcf/d of additional

capacity to move Marcellus production to Algonquin City Gates

Customers:UIL Holdings Northeast Utilities National Grid NiSource City of Middleborough, MA City of Norwich, CT

Project Status: Received FERC certificate, Mar. 3,

2015 Commence construction 2Q15 In-service 2H16

Regional Supply

Map and info: Spectra Energy

Connecticut Expansion Project:Kinder Morgan / TGP

Project Scope: Providing 72 MMcf/d of

additional capacity to meet utility demand

Customers:UIL Holdings (CT Natural Gas &

Southern CT Gas)Northeast Utilities (Yankee Gas)

Project Status: Filed for FERC Certificate Proposed Construction Start

Date – November 2015 Proposed In-Service Date

– November 2016Source: Kinder Morgan

Niagara Expansion: Tennessee Gas Pipeline

Project Scope:Seneca Resources will serve as the foundation shipper for TGP’s Niagara Expansion Project, which is designed to provide transportation from the Marcellus Shale in Pennsylvania to TGP’s interconnect with TransCanada Pipeline in Niagara County, NY, to serve growing markets in eastern Canada.TGP will provide for the expansion capacity (158,000 Dth/d) through a combination of existing capacity, pipeline looping, compressor station modifications and off-system capacity on the interstate pipeline system of National Fuel Gas Supply Corporation, also a wholly owned subsidiary of National Fuel.

Project Status: Received FERC certificate, Feb. 2015 In-service Nov. 2015

Map and info: Kinder Morgan

Northern Access 2015 Project: National Fuel Gas SupplyProject Status: Received FERC certificate, Feb. 2015 Map and info: National Fuel

Garden State Expansion: Transco/Williams

Project Scope: Provide up to 180,000 dekatherms

per day of natural gas service in two phases to a new delivery point with New Jersey Natural Gas in Burlington County, N.J. Installation of new compression and

meter/regulation station; no pipeline expansion required.

Customer:New Jersey Natural Gas

Project Status: FERC filing, Feb., 2015 Est. Phase I in-service: Nov. 2016 Est. Phase 2 in-service: Nov. 2017

Map: Transco/Williams

Atlantic Bridge Project:Spectra Energy

Map and info: Spectra Energy

Location: New England and Maritime Provinces

Capacity: 220,000 dekatherms of natural gas per day

In-Service Date: November 2017; in pre-filing process with FERC

Northeast Energy Direct Project:Kinder Morgan / TGP

Source: Kinder Morgan

Project Scope: Scalable up to 2.2 Bcf/d of

additional capacity to meet NE and Atlantic Canada market demand

Anchor Shipper Customers: 9 LDCs, with capacity of 500,000

Dth/d, including: The Berkshire Gas Company Columbia Gas of Massachusetts Connecticut Natural Gas Corp. Liberty Utilities (EnergyNorth

Natural Gas) CorporationNational Grid Southern Connecticut Gas Corp. City of Westfield Gas & Electric

Light 2 othersProject Status: Project Development and

Commercial Negotiations – OngoingOutreach Meetings at state, local

and town level - Ongoing

Project Status (cont’d): Route Selection and Permit Preparation – Ongoing Planned FERC filing – September 2015 Proposed Construction Start Date – January 2017 Proposed In-Service Date – November 2018

Access Northeast Project:Spectra Energy, EversourceEnergy, National Grid

Map and info: Spectra Energy

Project Scope:The gas pipeline expansion project will enhance the Algonquin and Maritimes pipeline systems and market area storage assets in New England to deliver up to one billion cubic feet of natural gas per day for electric generation markets. Alliance with Iroquois Gas Transmission announced, 12-14.

Proposed in-service:November 2018

PNGTS’s “C2C Project”

Map and info: Portland Natural Gas Transmission

Iroquois’ “SoNo Project”

Map and info: Iroquois Gas Transmission

PennEast Pipeline Project

Project Scope: Provide up to 1 Bcf/d to move Marcellus

production to customers in PA and NJ. Proposed 110-mile, 36” pipeline.

Project Partners: AGL Resources,NJR Pipeline Company, a subsidiary of

New Jersey Resources, PSE&G Power, Spectra Energy Partners, South Jersey Industries,UGI Energy Services (UGIES), a

subsidiary of UGI Corporation.

Project Status:Open season held, Aug. 2014 In FERC pre-filing process, Oct. 2014 Proposed in-service: 2018

Map: PennEast

Regulatory Initiatives

Carbon & Methane Emissions

• June 2014: U.S. EPA’s “Clean Power Plan”

• Proposed rule to cut carbon emissions from existing power plants

• Jan. 2015: Obama Administration announced plan to cut methane emissions – proposed rule to be introduced this year

• Among goals is to “reduce leaks from well sites, gathering and boosting stations, and compressor stations…”

145

150

155

160

165

170

175

180

1990 2005 2009 2010 2011 2012 2013

MM

T CO

2 Eq

.

Source: U.S. EPA Draft Greenhouse Gas Inventory, Feb. 2015

Methane (CH4) Emissions, U.S.Natural Gas Systems, 1990-

2013

Methane emissions from U.S. natural gas systems have declined by 9% since 1990, according to EPA’s latest annual data released in Feb. 2015

System Safety

• In January, the National Transportation Safety Board (NTSB) adopted a safety study on integrity management of gas transmission pipelines in high consequence areas. The study includes recommendations addressing a broad range of improvements. These include broadened use of in-line inspection, the inspection method that detects the most potential problem areas per mile of pipeline.

• Primary focus of state commissions,along with addressing methane emissions.

Questions?

30.